Jurrien Timmer, director of global macro for Fidelity Investments, published his analysis following the recent US stock market pullback. According to Timmer, the recent pullbacks were the result of 2 market imbalances. One imbalance was caused by the stock market gaining twice as much as was justified by the recent tax cuts. The second imbalance was the stock markets' lack of attention to the sharp rise in bond yields.

Timmer says the market is now in much better balance, with strong earnings growth pushing the market higher, but higher rates acting as a headwind for valuations. Meaning stock prices should rise less than earnings growth, not more than earnings, as they have for several years.

With double digits earnings growth he believes this is still a bull market scenario, though a late cycle one.